I suspect the terminology is the confusion. For me at least. Here is my interpretation.
I believe both sides to this debate are correct. How can that be?
SHORT ANSWER
I believe the confusion is due to confusing TAX YEARS in which income / ACA subsidies received occurred and TAX FILING YEARS, which is the year after. See below.
TAX YEAR: Jan 1 - Dec 31, 2020, FILING YEAR DUE 27 MAY 2021*
TAX YEAR: Jan 1 - Dec 31, 2021, FILING YEAR DUE 15 APR 2022
*NOTE: This year's normal IRS Tax Filing deadline of 15 APRIL 2021 has been extended until 27 MAY 2021.
See: https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-a...
And,... Done,... unless you want a more detailed interpretation
LONG ANSWER
There is TAX YEAR, defined as the year in which income / ACA Tax subsidy was earned / received.
And there is TAX FILING YEAR, defined as the year in which a tax return is FILED, which is for the PRIOR YEAR.
Therefore, as I read it, the income earned and / or ACA Tax Subsidy / credit received for the TAX YEAR 2020 for which the TAX FILING YEAR is 2021 - now.
So, what the ACA references is for those who received an ACA subsidy in TAX YEAR 2020, and who underestimated their earnings, and were it not for this recent "forgiveness" bill, would otherwise have to repay a part of their subsidy. I read that this otherwise required 2020 Subsidy repayment amount will be forgiven, and that will not have to be repaid when the person files their Return for the 2020 TAX YEAR, which would be normally be filed by April 15, 2021 has been extended until May 27, 2021 of this year.
(As noted in the short answer above, the tax filing extension see:
https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-a...)
In summary, any ACA Subsidy repayment will be forgiven for what would normally be required during TAX YEARS 2020 and 2021; and those returns would be filed there following year in April, which is the corresponding TAX FILING YEARS of 2021 and 2022.
That is my understanding. The simple logic seems to be this. Our government representatives in Congress created this to apply to years affected by Coronavirus. That would be 2020 and 2021. It is retroactive to last year because the virus affected the full year. The same could be true for the current 2021 year, in which the virus is still affecting the population, economy, etc. The next year, 2022, is an unknown and wouldn't be decided yet.
It follows that the (earnings / ACA subsidy) 2020 and 2021 TAX YEARS correspond with the TAX FILING YEARS of 2021 and 2022, the years the taxes are filed, are what is referenced in the summary of legislation.
Reasoning this through, why would the government not apply this forgiveness to the year hardest hit by Coronavirus? (Jan 1-Dec 31, 2020), and yet commit to the forgiveness for Jan 1-Dec 31, 2022? That would make no sense whatsoever. The year 2022 doesn't even begin for another 8.5 months, and that year runs 12 months for a total of 20+ months from today.
The coronavirus issue should be irrelevant by then. Why would they pre-plan a forgiveness so far in advance? (I suspect someone will answer with something like, "Because they are idiots! ... they are politicians!" I know, I know, ... but still...)
Anyway, I hope this helps.
